Technology Transforms Investor Access to Markets

The global financial advisory landscape is being transformed by artificial intelligence, digital platforms, and wider technological advances.

This evolution is being accelerated by the unprecedented intergenerational transfer of wealth—assets shifting from baby boomers to millennials and Generation Z.

Younger heirs have distinct expectations compared to their predecessors.

They seek digital-first services, transparent pricing, and increased personal control over their financial choices.

According to research from Forrester, over half of consumers under 50 will turn to generative AI tools as their initial approach in seeking financial advice—emphasizing the magnitude of this shift.

South Africa: An established sector slow to evolve

While South Africa’s financial advisory sector is robust and lucrative, it is slower to adopt AI and digital tools compared to international counterparts.

The differences are pronounced.

	US/European firms	South African firms
GenAI adoption rate	>80%	<20%
Primary use cases	Advice, risk modelling, portfolio management	Sales, marketing, back-office operations

Note: Adoption rate figures are based on industry surveys available at the time of writing.

Slow regulatory adaptation and entrenched commercial interests have led to this delay, but the advantages of digital transformation for consumers make broader adoption appear unavoidable.

Core advantage: Democratising investment

The key outcome of digital transformation in finance is the democratisation of investment.

Investment products and information once limited to high-net-worth individuals and institutional investors are now increasingly accessible to anyone with a smartphone and a modest amount of capital.

Such products typically come at a lower cost and offer greater transparency.

Actively Managed Certificates

One product type highlighting this shift is actively managed certificates (AMCs).

Initially developed in Switzerland—where pioneers like UBS and BNP Paribas emerged—AMCs have evolved into a prominent global asset class. This market has grown to exceed $1 trillion in assets under management, with over R25 billion listed on the JSE.

The key advantages of AMCs for investors include:

• Access to focused, professionally managed portfolios without needing a bespoke mandate—AMCs trade as listed instruments on the JSE;
• No capital gains tax liability on trades executed within the AMC structure;
• Exposure to international assets through a familiar listed instrument;
• The ability to diversify capital across various portfolio strategies;
• Cost efficiency compared to traditional actively managed unit trusts;
• For asset managers, managing a single portfolio without CGT constraints allows for greater focus and conviction;
• Daily liquidity, giving investors flexibility.

ETFs and Active ETFs

Exchange-traded funds (ETFs) and the newer active ETFs (AMETFs) signify a further advancement in accessible investment products.

Both are popular globally and in South Africa, providing investors with exposure to a wide range of asset classes. They tend to be less expensive than actively managed unit trusts, offer daily liquidity, and ensure full transparency of holdings.

Many benefits associated with AMCs apply to ETFs, making them a valuable component for retail investors.

Fractional Ownership

Platforms like EasyEquities have popularized fractional ownership of shares, ETFs, real estate, and more—making investments that were once out of reach accessible to a broader audience.

In the future, retail investors may gain access to private equity via similar mechanisms, significantly broadening the investment landscape for everyday South Africans.

The Future: AI-Driven Advice

The pace of change is anticipated to accelerate, with AI-driven robo-advisors likely to become increasingly significant.

These tools could provide personalized, high-quality financial guidance at a fraction of the cost of traditional advisory models.

The overarching trend is clear: financial advice and sophisticated investment products are becoming more accessible, affordable, and transparent.

MH Capital’s Role in This Transition

MH Capital is actively involved in this transformation.

Our AMC is currently available to all investors on the JSE, offering access to a concentrated portfolio of local and international shares across various market capitalizations.

We are also looking into ways to broaden access to our private equity portfolio, which is currently limited to a select group of investors. Digital transformation has the potential to change this for the benefit of smaller investors seeking diversified exposure and private companies aiming to attract a broader pool of capital.

After years of gradual change, the financial advisory sector seems to be nearing an inflection point.

Fueled by technology, changing demographics, and evolving consumer expectations, the industry is shifting towards a model that is more inclusive, transparent, and competitively priced.

For investors ready to engage with these developments, opportunities abound.

Disclosure: MH Capital is a South African investment manager that provides an Actively Managed Certificate (AMC) listed on the JSE. This article reflects MH Capital’s views and should be interpreted in that context. It does not constitute financial advice.

Brought to you by MH Capital.